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Profit transfers higher than EU subsidies

January 30th, 2018

A university lecturer argues that it would be unfair if the European Union were to introduce new political conditions for regional and cohesion subsidies to continue beyond 2020. His contribution is part of a debate over calculations by the French leftwing star economist Tomas Piketty, who wrote that on aggregate Hungary and the rest of the Visegrád countries are the losers of the ‘free market access for development subsidies’ system operated by the European Union.

On Mandiner, László György, a lecturer at Neumann University defends Piketty’s thesis against criticism by a liberal author. 

On Kapitalista, HVG’s liberal economists’ blog, Elek Tokfalvi (a penname which is a jocular Hungarification of ‘Alexis de Tocqueville) reacts to a previous article in which a Neumann University professor confirmed Piketty’s calculations.  Tokfalvi remarks that Neumann University is funded by the National Bank whose PresidentGyörgyMatolcsy is the theorist of Hungary’s ‘unorthodox’ economic policies. His main argument, however, is that to demand the suspension of foreign investment on the grounds that it would lead to profit transfers would be foolish.

György retorts that nobody is advising the government to curb foreign investment and that the argument was aiming to debunk attempts by EU politicians to make cohesion funds dependent on what they call European political standardsincluding the acceptance of immigration policies as defined by the majority of member states. Those funds were agreed upon to offset the impact of free market access which was bound to unleash superior competition on local producers, hence it would be unfair to set new conditions for continuing to provide them, György concludes.

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